Economic Sanctions and Inequality in the US-Iran Nuclear Negotiations

After long negotiations, this summer saw the agreement of an historic nuclear deal between the P5+1 countries and Iran. Agnese Macaluso, Researcher at The Hague Institute, analyzes in this new Working Paper the extent to which the inequality that has traditionally marked relations between the United States and Iran has affected the negotiation process and its outcome.

The paper assesses the negotiations through the lenses of equality, intended as a procedural and distributive justice principle. Recent literature suggests that negotiated agreements which are based on equality are more durable over time. Macaluso argues that, as a legacy of three decades of economic sanctions and political and economic confrontation, the process and the outcomes of the negotiations have been characterized by a lack of reciprocity and are deeply unbalanced, or are perceived as such. As a result, the durability of the agreement comes into question.

The paper analyses the history of Iran US-relation since 1979, to show how inequality has characterized their relations. The severe and unilateral damage caused by the sanctions imposed on Iran for decades, combined with the rejection of any engagement or dialogue opportunity illustrate the notion that Iran was for a long time seen primarily as an enemy to isolate, rather than a party to engage. Negotiations are clearly the result of this interaction, and deeply reflect the degree of inequality, mistrust and confrontation that has preceded them.

The paper suggests that, while equality can be considered a moral principle, when it comes to negotiations it has proven to also be a crucial factor in promoting mutually recognized and sustainable solutions. It is therefore in the interest of the parties to promote respect and application of this principle, for their own sake rather than for ethical reasons.

From the perspective of distributive justice, there has been significant inequality in the allocation of costs and benefits between the parties. While Iran and the P5+1 both stand to gain from the lifting of sanctions, the allocation of costs is very unequal. The limitations foreseen on the Iranian nuclear program have high political and economic costs for Iran, while the costs for the P5+1 countries are minimal. Besides, the analysis of the Treaty on the Non-Proliferation of Nuclear Weapons suggests that the legitimacy of the limits imposed on the nuclear program is contested.

Issues of procedural justice have also affected the negotiation process and its outcomes. The perception that the structure of the talks has been unfavorable to a particular party has implications on the way the outcomes of that process are perceived. In this regard, the different interpretations of the provisions agreed in various stages of the negotiations, as well as Iran facing five world powers at the negotiating table, display the idea that the design of the negotiations are not conducive to an equal agreement.

Furthermore, decades of economic sanctions and political confrontation have also had detrimental effects on trust. Other cases suggest that when deals are not perceived as equal and as allocating fair burdens and advantages, they tend to be less durable. In the case of US-Iran relations, the lack of trust combined with an agreement that is perceived as unfair might have repercussions in the long term, when the pressure of sanctions and the urgency to resume an agreement will be over.

The Distinguished Speaker Series (DSS) showcases eminent practitioners in international affairs and is the centerpiece of the Institute’s high-level engagement with practitioners and academics in the city…